CONTEST BREWING OVER EXXON FINES

Issues flared again this month concerning Prince William Sound in Alaska. Some of them should alarm the oil and gas industry. First, fishermen picketed Valdez terminal for 3 days, blaming two poor salmon harvests on the Exxon Valdez spill of March 1989. Then the General Accounting Office (GAO) found much to fault in the handling of money from Exxon Corp. in settlement of civil and criminal claims arising from the spill. The developments are related in more ways than geography.

Aug. 30, 1993

3 min read

Issues flared again this month concerning Prince William Sound in Alaska. Some of them should alarm the oil and gas industry.

First, fishermen picketed Valdez terminal for 3 days, blaming two poor salmon harvests on the Exxon Valdez spill of March 1989. Then the General Accounting Office (GAO) found much to fault in the handling of money from Exxon Corp. in settlement of civil and criminal claims arising from the spill. The developments are related in more ways than geography.

It's easy to sympathize with the fishermen. There was a major oil spill in 1989. Salmon seem to have avoided Prince William Sound for the past 2 years, wrecking the fishing industry and the livelihoods of associated humans. Distressed fishermen jump to what seems like the obvious conclusion: Effects of the spill chased the fish away.

Maybe. But what about the 2 years immediately following the spill, when salmon fishing was reported to be great? How can the spill have put something in the water that salmon don't like now but that they did like earlier? Of course, not all environmental effects are immediate. A delayed reaction to the spill is not out of the question.

Science might help sort out these perplexities. To the extent science must depend on funds from Exxon's settlement, however, it may never get the chance.

GAO'S GRIPE

The GAO report criticized government handling of Exxon's payments so far on the record $1.125 billion settlement it reached with the U.S. and Alaska in October 1991. It said that through last December $107 million had compensated government for spill-related activities, $40 million offset fines against Exxon in accordance with the settlement agreement, and $19 million defrayed government costs for administration and damage assessment.

Given the lack of precedent for settlements of this size and nature, what's to gripe about? Rep. George Miller (D-Calif.), chairman of the House Natural Resources Committee, provided a clue in a statement issued in conjunction with the GAO study: "The report documents that the past administration failed to assure that the Exxon Valdez funds were used wisely to protect natural resources that were affected by the oil spill. Instead, the bureaucrats gave top priority to feathering their own nests with reimbursements and gold-plated studies of questionable merit."

SERIOUS AGENDA

Miller's tiresome political bluster masks a serious agenda. He and his environmentalist supporters say they want the government to use settlement funds less for studies of oil spill clean-up methods and effects and more for land acquisition to halt logging and development. That's something the industry--indeed, anyone in a position to make an environmental mistake--should resist.

Using proceeds from environmental penalties this way makes foreclosure of economic activity an official preference. The strategy serves do-nothing environmentalism and nothing else--certainly not the national imperatives of economic growth and job creation. If do-nothing extremists succeed now, if they secure more of the Exxon Valdez penalty to buy land, they'll be back every time there's an environmental accident, clamoring for higher penalties then grabbing as much as they can to enlarge their holdings of idle real estate. It's a dangerous incentive to turn loose in a struggling economy.

The Exxon Valdez money should be spent on remediation and spill studies, not on destroying loggers' jobs. If one isn't under way now, a scientific inquiry into where the Prince William Sound salmon went and why would certainly be in order.